RockTenn to Acquire Smurfit-Stone for $3.5 Billion

Smurfit-Stone agreed to become the subsidy of Norcross’s RockTenn yesterday, bringing the total value of the new company to $9 billion, according to the company’s calculations. The headquarters will remain at the Norcross location.

RockTenn currently produces paperboard, packaging and displays. 

Just seven months ago Smurfit-Stone emerged from bankruptcy proceedings. In addition to creating packaging and containers, the Smurfit-Stone is one of the largest recycling companies in the world.  The transaction will be paid for with 50 percent RockTenn stock and 50 percent cash.

The Board of Directors of both companies unanimously approved the acquisition, which expands RockTenn’s reach further into the Midwest and West Coast. 

“We always say we will only do acquisitions that are attractively valued,” said RockTenn CEO and Chairman James A. Rubright in a conference call with his shareholders today. “We think North American container board has become a very, very good business,” he added, explaining that virgin containerboard has “tremendous importance” with the increased recycling capabilities around the world.

The acquisition would make the combined company the second largest producer of North American containerboard and the second largest producer of coated recycled board.

Rubright said on the call that he feels that the acquisition is “a terrific runway for gains.”